Taiwan currently has approximately 1,950 companies listed on Taiwan Stock Exchange (TWSE) and Taipei Exchange (TPEx). Pursuant to Paragraph 7, Article 36 of the Securities and Exchange Act, these companies should convene their 2020 shareholders’ meetings by the end of June 2020. Considering that shareholders’ meetings are traditionally held indoor, before the containment of the COVID-19 outbreak, such indoor gatherings are considered high-risk activities.
Hence, in a bid to strike a balance between shareholders’ rights to attend shareholders’ meetings and the prevention of further spread of COVID-19, Taiwan Depository & Clearing Corporation (TDCC) has established the “Guidelines on Convening Shareholders’ Meetings in Response to the Outbreak of COVID-19” (the “Guidelines”) for the reference of companies listed on TWSE and TPEx, in consultation with the relevant agencies, organizations and representatives of the public listed companies and in reference to the COVID-19 response guidelines and recommendations published by Taiwan’s Center for Disease Control, as well as taking into consideration the common practices with respect to stock affairs.
A summary of the Guidelines is as follows:
l The notice for convening a shareholders’ meeting must specify the epidemic-prevention measures that will be implemented on the day of the meeting so that the shareholders can make proper preparation in advance. For instance, the notice may include a reminder to encourage the shareholders to take advantage of the E-Voting system to exercise their voting rights, and specify that shareholders must wear face masks during the meeting and will be subject to temperature checks before entering the meeting venue. If a shareholder’s temperature exceeds 37.5 (reading from a forehead thermometer) or 38 (reading from an ear thermometer), he or she should be sent to an isolated venue separate from other attendees.
l Without compromising the proper procedures of the meeting, the chairperson presiding over the meeting or the announcer should encourage the shareholders to make their statements or questions brief to ensure a smooth and efficient meeting and to curb the spread of COVID-19.
l Companies convening shareholders’ meetings must ensure that the placement of the sign-in desks, the seating arrangements and the venues will allow all attendees to keep a proper social distance of at least one (1) meter from each other.
l A longer sign-in time should be scheduled to ensure that the meeting can be commenced and concluded smoothly and in compliance with the government’s epidemic-prevention policies.
As it remains unclear whether the COVID-19 outbreak will be contained by mid-year, the competent authorities recommend that all companies follow the Guidelines to plan the details of their shareholders’ meetings as soon as possible, and will make proper and timely adjustments to the Guidelines in accordance with the TCDC’s latest announcement regarding COVID-19. If your company wishes to learn more about the Guidelines and relevant issues, please do not hesitate to contact us.